Interview_ India Should Follow US and European Model for Import Duties

The current absence of an anti-dumping duty is hampering manufactures’ aspirations for expansion, according to Surana Solar Executive Director Manish Surana. Surana says India would benefit from analyzing the approach that US and European solar markets take toward anti-dumping duties and model India’s approach after them.

Mercom India’s news team had a conversation with Surana on a few issues affecting the domestic solar industry. Here are excerpts from that interview:

As an Indian manufacturer, what do you think about the Indian solar sector?

From the perspective of a manufacturer, we feel that the policies have remained unchanged for the last couple of years and the market has been very stagnant. Many promises have been made, like saying that there will be an anti-dumping duty on Chinese products, but so far there has been no development on that front while we continue to pay a duty on glass and other raw materials. Given the circumstances, it’s very hard for Indian manufacturers to compete with the Chinese. The market has been very stagnant, and we are awaiting a few good government policies to promote the ‘Make in India’ program so that the industry grows rather than just maintaining the status-quo.

You mentioned the anti-dumping duty. What are your views on it?

Once the anti-dumping duty comes into force, it will provide a great boost for domestic manufacturers. Right now, the Chinese are selling components at a rate which is 10 percent cheaper than ours. Therefore, any duty around 10 percent would ensure that our sales increase.

I feel the anti-dumping duty should be levied in phases. In the first phase, it should be applied to modules and then gradually applied to cells as well. I say this because there are many module manufacturers in the country today but only a few cell manufacturers. If the government gives a six-month deadline after which they would impose a duty on cells, I am sure many manufacturers would set up their own facilities in India. This would boost the solar industry and create huge employment opportunities in the country.

Recently, MNRE announced plans to hold tenders that would add 20 GW of  capacity to Indian solar parks in the 2017-18 fiscal year and the Solar Energy Corporation of India (SECI) invited Expressions of Interest (EoI) from manufacturers to set up a 20 GW integrated solar manufacturing facility. What are your thoughts on these government efforts to assist the industry?

The tender trajectory is good, but going by the current scenario, it won’t be really beneficial. What Indian manufacturers need is either a certain quota for the deployment of locally manufactured modules or an import or anti-dumping duty on imported solar components. Only then will we gain clear market visibility. A duty would allow us to increase our capacity and help us participate in the government’s 20 GW manufacturing program.

If either the duty or the quota is not provided, then this trajectory won’t mean much for local manufacturers.

Speaking of quotas, the Domestic Content Requirement (DCR) has ended and attempting to recreate a similar program would be a violation of World Trade Organization (WTO) rules. What do you suggest India do instead?

I agree that under the WTO norms we cannot have a quota or DCR category tenders. However, what we can do is adopt the US and European market models for solar. The U.S. has imposed another round of anti-dumping duty while European countries have placed a minimum import price on any Chinese components.

If we replicate these models, it would be good for Indian manufacturers. There would be no need for a quota and we would not be in breach of WTO rules or fair-trade policies.